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hi bubbleboy,
I've posted my view on gold at TT here:
http://www.traders-talk.com/mb2/index.php?showtopic=119619
At this point I think we agree that the 4.5 and 9 year lows have come and gone. Did this just occur here in February or last summer? I think we will only understand that as we move through this summer.
cheers,
john
Jim McLaren today ...
http://www.mclarenreport.net.au/articles/articles/233/1/May-14-2010-CNBC-SQUAWKBOX-EUROPE-REPORT/Page1.html
Expect a big bull/bear struggle this summer. LOL.
cheers,
john
hi bubbleboy,
Nominally the 80 week low is due mid-August for the $SPX. For the moment I have no way to predict how we will move into that low. Every 20 week cycle has been quite short and very right translated (short sharp corrections). So it is quite possible that we put in another near term low (ie. by late May), head higher again and then correct viciously into an 80 week low. There has been no way to foretell cycle lows since the 40 week low in Nov., and the early Feb. low is a good example.
As for bonds, there is an important top looming sometime this summer and then it will be curtains for Treasuries for a couple of years. This will be part of the unpredictability of the markets. I am not playing bonds at all anymore, short duration or long. I only hold some corporates and preferreds.
cheers,
john
RCKS,
By my eye, the $SPX is in an expanding rising wedge. The problem is figuring our where we are.
The only strategy I will undertake now is to buy near the lower trendline hoping it holds as support, or short any rally near the top of the upper trendline for swing trades. Beyond that it will be daytrading and defense.
And of course we have to bear in mind that an $SPX 80 week cycle low has to be made within the next several weeks. Ideally that test is made by mid-August.
See the thread below.
http://www.traders-talk.com/mb2/index.php?showtopic=119437&pid=522801&mode=threaded&start=#entry522801
cheers,
john
BTW, this pattern developed as we broke out to new highs from the Feb. low. expect the unexpected.
RCKS,
I don't think there will be anything normal or blatantly bullish in the next few months. Expect the unexpected and huge volatility from May - August. Making predictions here will be a waste of time IMO.
What has already started will be a trader's delight, and a major headache for investors.
GL,
cheers,
john
hi Den,
If its a top, I'll likely consider a short or two. For now I'll just watch. Crude oil is worth watching. I was hoping for a low there (ie. May 20) to buy. Maybe not.
http://www.traders-talk.com/mb2/index.php?showtopic=119466
cheers,
john
hi slinky,
I'm unsure of the near term moves and quite happy to watch the SPX. Buying the down day Thursday/Friday last week was easy, but holding here for another possible 10 or 15 points on the SPX is not.
I'll be buying the dips this summer and into the fall. For now I like my precious metals position, although not excessive, I will add there when given the chance.
cheers,
john
Merriman has a turn for virtually all asset classes in late May. The actual date is May 20th for things like stocks, gold, oil and currencies. I guess that covers a lot doesn't it. Good to +/- 3 days. The turn could run into the following week (week May 24th). The last 3 star reversal was April 26 for stocks, so a good top was marked by that turn date.
I'm looking out for the coming low (to buy commodities), which may only be a retest of last week's lows. We could get a very inflationary run from that low. But will wait and watch.
This could also be the nominal low for the 18 month cycle. A higher low or a retest of last week's low may form in the fall.
Markets are difficult to predict so I won't get carried away with positions until the setup looks right.
Remember the House rules the casino.
cheers,
john
GS is still working on an 18 month low. Ugly candle today and the stock is testing support near $140.
GS is the market for the moment.
cheers,
john
I can't help but think how similar this selloff and subsequent rally is like Sept. 2009 when Lehman went bust. The trading is almost identical and the news flow as well.
Low risk long was Friday, and profit-taking works right here for me.
Nice work on your cycle lows. I expect a retest of last week's lows or worse in July. Time for some golf.
cheers,
john
den,
Kinda early. My target for the 80 week low has already been hit though (ie. 1050. close enough).
cheers,
john
hi blacktruck,
I wasn't implying that 140 would necessarily hold. It's an important level though.
What I want to know is who will buy the coming 18 month low for GS.
cheers,
john
GS is working on an 18 month low. $140 is a key level now for the stock. If they don't all get thrown in jail, they will make a pile more money in the coming commodity rally.
cheers,
john
hi slinky,
Thanks for the update. I've been doing my taxes of late and haven't spend much energy on the market or risked much.
An 80 week low in May sounds good to me. Merriman has a turn date of May (+/- 3 days) 20 for just about every asset class. So it will be an important one.
Time to watch and wait.
cheers,
john
hi Denmo,
hi lobster,
I'm still thinking an Aug./Sept. low. The $SPX may or may not take out the Feb. low. The high can come here in April or May. I'll let others pick the top as the cycles have been much more bullish than I expected here. Beyond that I have done little with the $SPX and will only focus on other areas in the coming months.
cheers,
john
hi den,
I've taken this little swing long in gold and some miners. HUI has potential to 450-460 but then resistance should become apparent and where I would take profits. Gold may run longer and setup a divergent high (gold runs and pm stocks lag). The better buy should come this summer or at least a retest of recent lows.
I'll hold the gold position and add later this year.
cheers,
john
hi slinky,
I hear you!!
The challenge now is not to trade this thing long to the top, but to anticipate where the 80 week low will arrive.
I think precious metals, China, emerging markets and things like GS are leading the move as they all bottomed in Oct./Nov.
cheers,
john
hi slinky,
Great post and very thorough. I have a problem with a 20 week cycle coming in at 14/15 weeks. I would only expect this at the start of a very bullsh cycle like last March. I just don't see the $SPX as that bullish this late in the 18 month cycle. No doubt that the Greek situation forced that low early.
We should be expecting a top to form in this timeframe or at least within the next several weeks. So my bias is that what we are seeing is part of a topping process for the $SPX. The short term cycles will be very hard to predict the next few weeks IMO.
I expect a pullback or consolidation now for the next couple of weeks. FED day should decide this. Watching precious metals, crude, and currencies, they are hinting a ST change.
cheers,
john
hi blacktruck,
The short answer is yes. A "C" wave down putting in a higher low triangle) would fit the bill for a 20 week low. But it would be longer in time now than the last two 20 week cycle periods.
cheers,
john
hi den,
re: $SPX 20 week low?
Looking back at price action, there was a little inverse head and shoulder with the right shoulder completing on Feb. 25th. That would be my guess for the 20 week low given the price action todate. Also from a nominal 17 week cycle, that more or less works.
Bulls can have their way here, but we are approaching resistance for the $SPX. The 20 week FLD sits directly overhead price. So a continuation higher later this month would trigger a target of $SPX 1250 or even slightly better.
Short term FLDs are in cascade position again and only a move below 1136 (today's low and now ST support) would possibly trigger a correction into a 5 week low.
No trades for me here unless we get a confirmation for a move back towards 1100.
For the moment, there is little good all this does me as far as trades.
cheers,
john
No sell today. $SPX needed a close below 1120 today to confirm. 20 days up into the current 5 week cycle and no sign of real weakness.
cheers,
john
Den,
I agree as I think they are. Remember too that the 50% retracement of the 2007-2009 bear is right at these levels.
http://www.traders-talk.com/mb2/index.php?showtopic=116627&st=0&p=509255entry509255
Looking at that chart you know what is at stake.
cheers,
john
hi Den,
Mea culpa. I did not see the strength of this move at all. I saw a 5 week low coming out of the Feb. low and a decent bounce.
But from here, a reversal for the $SPX back below 1120 crosses the first short term FLDs (upward cascade formation at the moment) and that would be the start of the move into a 20 week low. That should be confirmed today. Price is not likely to reach Feb. lows though.
cheers,
john
hi Chris,
When I saw your post yesterday, I was thinking high volume top. But a closer look shows that we tested the red candle high volume candle on Feb. 5th. So that is the line in the sand for now.
I haven't studied GE in while but I'll get back to you. I still am looking for a 20 week low in March. It is getting really late for that low if we saw a 5 week low Feb. 5th for the markets. We are 20 days along today from that low.
cheers,
john
Well most of those shorts are gone. I have no flippin idea where we go to from here. I'm starting to think this will be the story for 2010.
cheers,
john
hey doc,
Great summary. I have the same phasing.
As for the possibility that Feb. 5th was a 20 week low, I cannot find a way to reach that conclusion. Yes the bounce out of the early Feb. low (5 week low) was greater than expected, but a bounce was pretty much due nonetheless. Note how it came a little late at 25 days relative to recent 5 week periods which were running 22/23 days on average (with Dec. 31 as the last 5 and 10 week cycle lows). I think the decline in the days prior was overdone, so that gave fuel for the snap back.
I should remind ourselves that working out cycle lows around Christmas/New Years can be deceiving because trading is quite volatile.
My view is that the markets are showing weakness here in the way they trade, and the upside is limited at these levels. I think we have another 2.5 week cycle left to complete before a 20 week low arrives.
I'll sit and wait for a long setup in March. I have modest shorts on the SPY and some oil entered late last week.
cheers,
john
P.S. Den, I hope that provides a clear view of where my Hurst cycles stand.
Moot point IMO.
Dennis,
More ...
http://www.traders-talk.com/mb2/index.php?s=67ab17831312a744aedefcedfd54c43e&showtopic=116048
cheers,
john
hi Dennis,
Its too early for a 20 week low and its very late for a 10 week low here off the Nov. 2 bottom (40 week low). That's not bullish for the moment and I'd wait until the 20 week low arrives in March to look for any kind of a decent bottom to swing long. We can bounce here yet in the coming days, but it will just be volatility IMO.
I have made comments for some time how 2004 was completely different in its cyclic picture compared to today. Your best evidence will be coming up when we see the next 20 week low. I bet it takes out the 40 week low price of early Nov. In 2004, the $SPX did not breech that level (ie. previous 40 week low in late 2003) into an 18 month correction (by Aug. 2004). Some big tests are coming. If/when price takes out a previous larger cycle low (eg. 40 week) in the current smaller cycles that follow that low(10 , 20 week) , its bearish. Watch the Nov. low, its key.
The other thing is internals. I'm no expert, but the NYSE summation index is still trending down. It cut below the Nov. lows which is not good for bulls. That H&S thing is also breaking down.
http://stockcharts.com/charts/indices/McSumNYSE.html
I won't be doing much for the next 2 weeks. Off to Fort Myers on Monday. Please keep the snow away from that place until my visit is over. Snow seems to be everywhere else in the US at the moment.
cheers,
john
WOW, LOL!!
hi chris,
I too have a problem with Friday being a 5 week low. I had assumed this with the price action out of Friday's low. But once we took out Friday's print low, it says one of two things: 1) It was a 5 week low and cycles are quite bearish, or 2) the 5 week low is due shortly and we'll see a bounce into mid-Feb. I go with the latter.
The problem right now is that the charts look rather ugly. But you'd think they would bounce things at DOW 10000, SnP 1050 (/ES), and $TSX 11000. I would not be very short here.
cheers,
john
Took out Friday's low which I had as a 5 week low. That's a blow for the bulls. Much greater amplitudes than I am expecting off the top here.
cheers,
john
Slinky,
Nice work and good summary. Today's decline will mark a 3.5 day low which you could buy for a short term trade into early next week. While I expected a pullback today, the decline this morning is much greater than I expected and indicates a weak trend into the coming 20 week low. I think the fact that the 10 week FLD target was met indicates a good decline into early March.
cheers,
john
hi rlohmeyer,
Valiant effort on posting the chart.
http://postimage.org/image.php?v=PqCUBci
I agree with your phasings. I see a high early next week (likely the 9th), and then sideways and eventually down into a low the week of March 1. That will mark the next 20 week low. I'll be looking for a good long trade from there.
cheers,
john
Hi Dowdeva,
I'm not in the same camp as Terry on that one, but a secondary high is likely into the spring. In fact I am still trying to figure out how we get an August high this summer (per Landry) where I expect to see an 18 month low.
But what I am really interested in is seeing how this plays out in the coming year.
On a long term Bradley chart, that signature low coming this summer is the biggest since the early 30s. The one prior to that was the 1870s panic. Now it may all be in our rearview mirror already, but then maybe not. Then of course we have a 9 year cycle low due late 2011.
http://www.amanita.at/Interessantes/Artikel/detail.php?id=310
cheers,
john
hi Dowdeva,
Per Hurst, did we just miss edge band shorts on the US banks? I'm thinking GS, BAC, JPM etc. Same setup seems to have been there for precious metals (was studying leveraged shorts early this week but balked) and China via FXI.
cheers,
john
POP!
Just got the trendline break today (on stoch as shown on yesterday's chart) combined with a confirmed break of the 80 week VTL. So there is clear reason to suspect that the 80 week cycle has just topped. Time to be careful with longs going forward.
cheers,
john